Less than 2 years after Auckland Council’s zone-changing unitary plan started to become operative, council chief economist David Norman concludes that it’s been a major cause of housing intensification.

On the other side of the equation – which most on the council worried about as it wrote a plan encouraging more brownfield redevelopment & less new greenfield development – the urban fringes have taken a lower share of new housing.

The third important factor in the change of housing impetus is that intensification has spread through suburbia.

And the fourth is that developers have paid close attention to transport routes, especially rapid transit stops.

Image above: Auckland Council chief economist David Norman presenting to the council planning committee meeting at the Orakei marae.

The map below: The red dots represent intensification points around the Auckland region and the purple patches represent intensification along rapid transit corridors.

Mr Norman released a report on the unitary plan’s impacts on residential development at Auckland Council’s planning committee meeting yesterday – held at the Orakei marae – and spent over an hour answering questions from the committee about it.

The one councillor who would certainly have questioned Mr Norman’s view was Dick Quax, who died of cancer at the end of May, aged 70, after long advocating the removal of the rural:urban boundary and questioning intensification as a housing solution. The election for his replacement closes on 13 September.

Yesterday’s quizzing of the economist was more about the detail, not about the politics of greenfield versus intensifying use of the existing urban footprint.

The unitary plan became largely operative in November 2016, and the council now expects it could be fully operative next year, once the remaining 13 appeals are settled.

The changing market shares

Mr Norman said in his report it took about 9 months to begin to see the plan affecting what & where new dwellings were consented.

“In the 10 months since new dwelling consents began to surge in August 2017, total dwellings consented are up 27% compared to a year earlier. Almost all of the growth in consents has been in brownfield (existing urban) areas, reversing the trend toward more greenfield development over the previous 7 years.

“More intensive typologies, specifically apartments & terraced/townhouses, have grown to account for 54% of all new dwellings consented, compared to 37% 2 years ago. A disproportionate share of this denser development is around the rapid transit network.

Mr Norman said his analysis “provides an antidote to the view that relaxing development restrictions on the fringes of the urban area is necessarily the best way to reduce the housing shortage. People by & large prefer to live closer to jobs, infrastructure that works, public transport, schools, shops & other amenities. As a result, developers are showing a preference for delivering development in brownfield areas.

“Land on the fringes is significantly cheaper. But once the lack &/or value of infrastructure and proximity to amenities is accounted for, the market is displaying a strong preference for brownfield development.”

The day most of the unitary plan became operative, it up-zoned thousands of brownfield (existing urban) properties.

“Altogether, the plan provided capacity for up to one million new dwellings although, at the time, only an estimated 422,000 were deemed to be commercially feasible for development. This feasible growth was anticipated to be spread across brown & greenfield areas in a roughly 2:1 ratio.”

The chief economist’s unit at the council had estimated an upturn in new residential building consents would begin around April or May 2017, but this didn’t start until August. Since then, growth has been strong.

However, Mr Norman said little information was available about the effects of the plan on development patterns: “This report provides information to support future discussions & decisions about important issues such as whether to remove or relax the rural:urban boundary.”

How does he know there’s been a change in development emphasis?

“Building consents for new dwellings grew remarkably steadily from 2012 through to April 2016. This pattern broke, and growth plateaued, 6 months before the plan became operative in part. Anecdote suggested that many investors had bought brownfield land in advance of the plan becoming operative and were waiting to lodge consents for more intensive development once the plan was operative.

“During the period from November 2016 to July 2017, the first few months of the plan being operative, consent growth was even weaker, against the backdrop of a housing shortage approaching 40,000 in Auckland at the time. The data indicates that this was because developers were still making plans for more intensive development.

“Residential construction began to surge in August 2017. The number of new dwellings consented in the 10 months to May 2018 is up 27% over the same 10 months the year before, and annual consents were only 5% below the all-time peak in June 2004. This annual total is despite a much tighter 2005 Building Code regulatory regime & building consent authorities’ response to the leaky buildings crisis.

“There is significant evidence to suggest the sudden resurgence in consenting activity is the result of the plan beginning to work:

Brownfield areas dominate consents growth: 90% of all growth in new dwellings consented in the 10 months to May 2018 (since the upturn began in August 2017) is in brownfield areas where the plan delivered the bulk of potential for greater development

The trend toward green and away from brownfield growth has been reversed: The share of total new dwellings consented in brownfield areas in the 10 months since August 2017 has grown from 62% to 69%. This has reversed a trend of declining brownfield development as a share of building consents over the previous 7 years

More intensive building typologies enabled by the plan are being adopted: Terraced houses & apartments were 54% of new dwellings consented in the 10 months to May 2018. In the 10 months to May 2016 (ie, the comparator 10-month period before the plan was passed), it was just 37%

In the urban areas, the desired compact city is emerging: In the urban area, around 66% of new dwellings are multi-units, precisely what the plan aimed to deliver.

Further, Mr Norman said, “a disproportionately large number of dwellings are being consented in rapid transit network catchment areas – defined as living within 1500m of a train station or northern busway bus stop. This highlights that people value rapid transit access, and that development enabled by the plan is responding:

The share of multi-unit dwellings consented in rapid transit network areas is 16 times higher than the catchment’s share of Auckland’s land area. The rapid transit network catchment covers only 2.6% of Auckland’s land area, but accounts for 42% of all multi-unit dwellings consented in the last 10 months

11% of standalone homes were consented in rapid transit network catchments. This is 4.3 times more than the catchment’s share of land area

81% of all dwellings consented in rapid transit network catchments in the last year were multi-unit, helping to deliver the intensification that characterises transit-oriented development

Overall, 40% of all dwellings consented in the urban area were in the rapid transit network catchments, even though the catchments account for only a quarter of Auckland’s urban area.

Mr Norman said this analysis highlighted that people by & large prefer to live closer to jobs, infrastructure that works, public transport, schools, shops & other amenities. As a result, developers had revealed a preference for delivering development in brownfield areas.

“These findings provide evidence that counter the view that relaxing development restrictions on the fringes of the region, where few amenities exist, is the best way to reduce the housing shortfall. Land on the fringes is cheaper. But once the lack &/or value of infrastructure & geographic proximity to amenities is accounted for, the market is displaying a strong preference for brownfield development.”

Mr Norman said the central city was still the main target for developing apartments, but they were also becoming more common in the Albert-Eden ward and just across the harbour bridge in Takapuna & Devonport.

The exception was the Upper Harbour ward, where all 3 types of development were occurring. That ward includes Hobsonville, where all new housing is more intensive than the historical norms, including standalone homes.

Finally, there are changes in the south: “There are relatively large numbers of multi-unit dwellings being consented in the southern isthmus & southern local board areas. This suggests increased delivery of typologies in areas with larger Maori populations. Multi-unit developments are often cheaper on a per-unit basis than standalone housing, which may provide greater access to warm, dry modern housing for Maori in those areas.”

Another statistic, this one relating to the shortage of housing:

“In the period from April 2016-August 2017 we only saw 7.5% total growth in consents – 6%/year. What we’re seeing since then, in the 10 months to May 2018, is a 27% increase. Code compliance certificates are up 30% over that time period.

“We’re now generating code compliance certificates at a faster rate of increase than building consents, which means we’re catching up.”

Councillors’ questions

Cllr John Watson said intensification was one side of the equation, the other was bringing the price down: “Prices haven’t come down, they’ve probably gone up.”

Mr Norman: “A number of things colluded. We saw loan:value restrictions on investors. Investors are actually still in the market, but it’s largescale investors. Recent date shows foreign investors are still involved.”

At the same time as constraints were introduced, prices peaked in Auckland: “These 3 factors show they have played a part in decreasing prices. You also face the construction capacity constraints, which mean the cost of construction is going up 6-7%/year. About 4-5 floors, the cost is $6-7000/m² against $2500/m² for a standalone home.

“What is encouraging is house prices have not continued to accelerate, and I think the unitary plan is an important factor in that.”

Mr Norman said one factor affecting the provision of new homes – the time it takes to build – was much different because of the switch to multi-units: “Typically it was 6-9 months, a multi-unit can be 18 months.”

The value of special housing areas

Cllr Wayne Walker questioned the brief era of special housing areas introduced by former housing minister Nick Smith: “It dramatically escalated the value of land, sold & onsold by people who weren’t really interested in building on it. It’s in a situation where it’s not generating any housing and has escalated the value of neighbouring land.”

Mr Norman: “My personal view is that we probably didn’t get as much development out of special housing areas as we thought we’d see. The intent was around accelerating resource consent applications, but if I were to do it again, I’d require them to build in a certain time.

“What is different about what I’m talking about today [the widespread intensification], this is not land where you’ve had to get a private plan change request. This is a broad plan that affects the entire city, it immediately creates competition. Why should I pay this amount when I can get land cheaper 2 blocks over?

“What makes property valuable? You talk about the rural:urban boundary. I’ve seen very little evidence that accounts for land price differences inside & outside the rural:urban boundary. What we do know is that infrastructure makes it liveable [inside the boundary] and people pay for that.

“I’m far less convinced that we’ve been in a speculative bubble. We’ve had a huge increase in population and prices go up, helped by low interest rates. I think that is a factor.”

State of the construction sector

Mr Norman had some interesting observations on the calamity of the moment, the collapse of one apartment builder, Ebert Construction Ltd, into receivership and the questions being raised about the state of the vertical construction sector.

Mr Norman said he worked in the construction sector for several years, including 2 years as BRANZ (Building Research Association) senior economist, and built his own house. On the players in construction, he said: “These are businesses, like in every other sector, sometimes they make good choices, sometimes they don’t. It is not my view that it’s central government’s role to hold the hand of business.”

Taking a longer-term view, he said it shouldn’t be about keeping spending down, and the solution shouldn’t rest solely with the Government. The sector should use the spotlight on it as an opportunity to improve project management: “We are not talking about victims here.”

Nimby protests versus over-dominating structures

Cllr Chris Fletcher raised a specific issue which she suspected might be a more common anomaly in the unitary plan – the redevelopment of a former nurses’ home on Banff Avenue, Epsom, by new owner Housing NZ. She said the street had 40 bungalows, a church & a small church school. Understandably, she said, Housing NZ “are going to go for maximum yield”.

Cllr Fletcher said the neighbours would have been happy with 3-storey development, but Housing NZ intended to build to 5 storeys. Intensification was “a wonderful trend – but nor do I want to see it at any cost, and I want to see the continuing public support for the process.

“But if we have an anomaly, what is the route we take? I don’t believe it’s just nimbyism, they’re happy to see 3 storeys but not 5 storeys in a 3-storey street.”

This was a question for council plans & places general manager John Duguid, who thought the specific case was “probably long past the point where we can do anything. In other cases I certainly invite councillors & others to bring them to my notice and we can respond.”

When might prices fall?

Cllr Fa’anana Efeso Collins raised a question which is on the other side of the affordability equation from the clamour for an urgent increase in supply: “At what point – or what are the conditions – that will lead to a fall in house prices? Surely at some point there must be a fall in house prices.

Mr Norman: “Short of an economic meltdown that I am not forecasting, I do not see a reason why house prices should fall immediately or in the short term. I do think we will see 2 things. Firstly, why not a fall? The basics of supply & demand, we haven’t had the shortfall. You’ve got this floor propping up prices, that’s not going to disappear any time soon.

“The cost/m² is a lot higher in apartments. We are seeing a subtle change in typology. Over the last 5 years the average dwelling size has fallen from 210m² to 172m², a 38% reduction, and that’s because of the switch in typology.

“100m², we were able to do that before and live quite comfortably. A shortfall this size [which he estimated at about 45,000 homes], there is no incentive for anyone to build cheaper – why would you leave money on the table?”

Mr Norman’s second point was that a focus on building more expensive homes for greater profit ought to open up a market for different types of housing: “If the market would only deliver houses at $850-900,000, we’re potentially opening up a different type of housing – you don’t want a second living room, you just want to be warm & dry.”

Cllr Collins: “I accept the position but I think we have to accept there are people who will never attain that dream.”

Catering for large families

Cllr Desley Simpson asked what was being done to provide houses for large families, “given we are the biggest Polynesian city in the world.”

Mr Norman: “The way I estimate my housing shortfall is to calculate the number of residents in a household. Households are shrinking in Auckland and we’re seeing the number of people/household increasing, that’s because of our demographic input. So we’re very aware of the fact we are increasing housing and it affects some communities more than others.

“We’re also seeing it in terms of the typology. Our standalone homes are too large at an average 230m², but it is the way people are choosing to live.”

However, he had seen 5-6 bedroom houses where people were banding together to form bigger households.

Statistics NZ has attributed a rise in inflation in the June quarter to house prices & utilities.

In its quarterly consumers price index (CPI) release yesterday, Statistics NZ said the housing components rose 0.9% in the June quarter and 3.1% in the year to June.

The overall inflation rate rose from 1.1% in the year to March, to 1.5% in the year to June.

But overall, these shifts are small and the latest rises still leave inflation below the annual levels (measured quarterly) throughout 2017. Last year began with a 2.2% annual inflation rate in the March quarter, falling to 1.7% in June, rising to 1.9% in September and falling again to 1.6% in December.

The statisticians’ measure of overall inflation has been negligible in quarterly terms since a 2.3% rise in December 2010. In annual terms, the one time inflation has topped 2% since September 2011 was that March 2017 rise to 2.2%. As the global financial crisis that began in late 2007 bottomed out in 2010-11, the official inflation measures were 4% in the year to December 2010, followed by 3 quarters at 4.5%, 5.3% & 4.6%.

Comparing quarters with the previous quarter, the inflation rate for the latest quarter was 0.4%, down from 0.5% in March

Regions catching up in construction costs

Statistics NZ said construction prices in Auckland rose 0.6% in the June quarter, and 0.7% in Wellington. For the rest of the North Island, prices were up 1.2% – twice as much as the major centres.

Housing-related costs:

Rents rose 0.8% in the June quarter, 2.5% in the year

Construction of new dwellings (excluding land) rose 1.1% this quarter, 3.9% in the year, and

Electricity prices rose 1.7% this quarter, 2.9% in the year.

Statistics NZ prices senior manager Paul Pascoe said yesterday: “New Zealanders are paying more to keep their homes running, Rates, property maintenance services & home insurance are all higher than they were this time last year.”

Higher premiums, fire service & earthquake levies all contributed to an 18% increase in dwelling insurance in the June 2018 year.

The court declined an appeal by the Self Family Trust & adjacent landowners against the Auckland unitary plan, which zones Crater Hill & Pukaki Peninsula as rural land outside the rural urban boundary.

The South-western Motorway (State highway 20) cuts through part of the hill at Mangere.

The trust had proposed including the land inside the rural urban boundary to allow building up to 575 houses on certain parts of Crater Hill and appealed against the council’s unitary plan decision.

Landowners saw parts of Pukaki Peninsula as a future urban zone allowing urbanisation over areas of very productive land.

A coalition of 5 community groups & over 800 signatories petitioned the council in 2016 to save the hill & peninsula from development, which would have allowed the houses to be built on the region’s last undeveloped volcano.

They argued that the unitary plan described the volcanic cones & fields as “defining natural & physical features that provide a unique setting and contribute significantly to Aucklanders’ quality of life”.

The petition added: “Since 1950, 65% of the 26 volcanoes in the southern half of the Auckland volcanic field have been demolished, built over or severely damaged. Crater Hill is the last one left in private ownership and is currently in remarkably good shape in spite of the South-western Motorway & the owners’ quarrying & back-filling activity inside one part of the crater. The recommended unitary plan has an objective (D10.2.4) that states: ‘Where practicable, the restoration & enhancement of outstanding natural features is promoted.’”

Auckland Council planning committee chair Chris Darby said today the appeal was a test of the unitary plan provisions: “At the time the unitary plan was introduced, we were acutely aware of the need to protect the ‘green lungs’ of Auckland and ensure that the natural & cultural landscape of Auckland would be safeguarded.

In the Environment Court decision, Judge Jon Jackson and environment commissioners Eileen von Dadelszen & James Baines said that, while the decision would have implications for housing elsewhere in the city, housing demand wasn’t a simple issue: “It is not a case of ‘push the balloon of supply in here and it will bulge out elsewhere.’”

Taking into account the existing markets available for housing, the court was satisfied its decision would have minimal impact on housing supply & prices.

“Standing back and looking at all relevant considerations, properly weighted, we consider that Auckland Council drew the rural urban boundary in the correct place so as to exclude Pukaki Peninsula & Crater Hill. Its decision should be confirmed as creating an appropriate strong defensible boundary in this area.”

The Housing Industry Association of Australia’s principal economist, Tim Reardon, said in a report out on Monday the country needed to build over 230,000 homes/year to address its affordability challenge.

The report, Housing Australia’s future, presents scenarios based on population & wage growth to estimate the number of new homes required to avoid exacerbating the housing affordability challenge.

Mr Reardon said: “Over the past 15 years, Australia’s housing market has been dominated by a persistent undersupply of housing – the underlying cause of the rapid acceleration in prices and ultimately Australia’s housing affordability crisis.

“The excessive cost of supplying new housing lies at the core of the affordability challenge. This has been recognised by a number of key organisations, including the Reserve Bank of Australia & the Productivity Commission, and federal & state treasuries have identified the supply of housing as the key problem.

“In 2016, Australia built a record number of 230,000 new homes and we will need to maintain this rate of annual supply for the next 30 years if we are to meet future housing needs.

“The enormous pent-up demand for housing in metropolitan areas is now being met and, for the first time in 15 years, the supply of new housing is in balance with the demand for new housing.

“Housing affordability will not be solved by amending negative gearing, capital gains tax or imposing punitive charges on foreign investors. Such measures increase taxation on housing and further raise the cost of new supply, which is already excessive & inefficient.

“Meaningful action needs to include all 3 tiers of government, working with industry, to ensure the delivery of affordable residential housing.”

Government-owned company HLC (2017) Ltd – the former Hobsonville Land Co Ltd – is pushing hard to increase interest in 5 development superlots at Northcote, in keeping with the new government’s desire to get 100,000 “affordable” homes built over the next 10 years, half in Auckland.

Bayleys Real Estate launched an expressions of interest campaign late last year, seeking private sector partners to develop the 1.58ha in the 5 superlots.

Under Labour’s KiwiBuild policy, The Government wants to get 100,000 affordable homes built within 10 years, half of them in Auckland.

HLC has supervised development at Hobsonville Point, in West Auckland, where over 1000 houses have been built in 5 years. On completion, that 167ha masterplanned development will have 4500 houses & over 10,000 residents.

At Northcote, the focus in stage 1 of redevelopment of the state housing block will result in 298 old state houses being replaced by 400 new ones.

For stage 2, HLC, a subsidiary of Housing NZ Corp, appointed Bayleys to release the 5 superlots, which range in size from 2572-3665m². Registrations of interest close on Friday 16 February.

HLC chief executive Chris Aiken said a shortlist of potential home builder partners would be identified by March and the final selection made in April.

55% of the potential 165 homes in the 5 superlots have to be “affordable”, defined as a maximum price of $600,000 for a terraced home, $500,000 for apartments.

On completion, the whole project will provide about 1200 new homes near the Northcote town centre over a 6-year period.

Despite widespread construction sector doubt that delivering 10,000 more homes/year is beyond New Zealand’s capacity, Housing & Urban Development Minister Phil Twyford continued to talk yesterday as if the Government’s KiwiBuild initiative would deliver precisely that: 100,000 affordable houses over the next 10 years.

The country, and particularly Auckland, has been running well short of housing demand, and well short of the previous government’s aspirations to get more homes built.

Consents have been stuck on an annual rate of 30,000 new homes for months. I wrote in July that, at an average 2.7 residents/household, New Zealand’s population increases of the preceding 2 years would have required housing increases of 36,000 homes built in the year to June 2016, and 39,300 built in the year to June 2017 (ignoring demolition or falling into disuse).

Mr Twyford said yesterday: “The latest forecast in the half-year economic & fiscal update shows an extra $5.4 billion of residential construction investment will take place over the next 4 financial years, largely as a consequence of KiwiBuild.

“Ministry of Business, Innovation & Employment projections under the previous National government had shown the number of houses consented would stall and start to fall in coming years. This government is focused on turning that around.

“Through KiwiBuild & policies to drive speculation out of the market, including the ban on non-resident foreign buyers, the Government is delivering a more stable housing market.

“Wages are forecast to grow faster than house prices for the first time since the global financial crisis, and interest rates are expected to remain low. Home ownership will become more affordable for New Zealand families.

“The Government’s housing package will deliver more affordable homes, more state houses, improve the quality of rentals & security of tenure, and tilt the balance in favour of homebuyers, rather than speculators.”

Fletcher Residential Ltd’s proposed private plan change for the Three Kings quarry precinct ran into a minor timing hiccup yesterday on its way to being adopted by Auckland Council as if it were a council plan change.

Council plans & places general manager John Duguid told the council’s planning committee that, because of Housing NZ’s application for court costs against the 2 local societies which had opposed the quarry subdivision, as of yesterday the council couldn’t adopt the plan change.

That position was expected to change within days after Housing NZ withdrew its costs claim. The societies withdrew their appeal against the subdivision in May and, with the costs issue out of the way, the court could finalise the hearing.

The council committee unanimously approved a course to completion of the agreed plan change process.

Puketapapa Local Board chair Harry Doig said the challenge had cost the community “something like $200,000”, but it had achieved a better outcome and the local board now supported the council taking over the plan change.

The committee chair & deputy chair have delegated authority, along with an Independent Maori Statutory Board member, to approve adoption of the plan change once the precinct provisions have been made operative.

Fletcher Residential owned 15.2ha of former quarry, and the council owned about 6ha of former quarry, some of it used as sportsfields. In a change from some of the proposed land swaps, Fletcher wants to acquire council depot land instead of the sportsfields and intends to build up to 1500 new homes, plus a whare manaaki (a community educational & cultural facility).

Much of the development will be apartments, up to 5 storeys, with a minimum average apartment size of 55m² in buildings of 20 or more units. 30 garage lofts known as “Fonzie flats” are also planned, with a minimum size of 30m².

The development will also have cascading apartments built above the quarry rock faces and cascading over them.

Real Estate Institute statistics out yesterday showed Auckland’s residential median sale price was still rising, but only by 2.5%/year, whereas the rest of the country was up 11.4%.

The divergence in price between Auckland & the rest of the country remains wide. Auckland’s median in June was $850,500 ($830,000 in June 2016), while the median for the rest of the country was $431,000 ($387,000).

The institute’s house price index showed Auckland falling 0.6% over the year, but the rest of the country rising 9.2%. The national movement for the year was up 2.8%.

Real Estate Institute chief executive Bindi Norwell said yesterday: “We know that it’s winter and the election is just 2 months away now, which typically impacts the number of properties sold in the market. The number of properties sold across the country is the lowest we’ve seen in the month of June for 3 years – particularly in the $500,000-&-under property price bracket. This slowdown in transactional activity, but stabilising price trend, highlights the underlying dynamics between housing demand & housing supply, with population growth continuing to rise faster than building consents & dwelling supply.”

“The June figures show us that a number of things are happening across the residential real estate market – inventory levels are impacting pricing, loan:value ratios are having a significant impact in terms of buyers’ ability to purchase properties (particularly for first-time buyers) and that the major trading banks are being more cautious with their approach to lending, particularly their view of how highly leveraged Kiwis are when it comes to properties.

“Talk of a decline in prices may be premature, with the seasonally adjusted median price trends still rising across many regions in New Zealand. The Auckland market is the most mature in terms of the property cycle. However, at worst, prices in the Auckland region are steady at present. The data also shows an emerging trend of section sales in Auckland occurring more quickly than dwelling sales, highlighting that demand for sections is still rising in Auckland while demand for dwellings is easing.

“With the looming election, Auckland prices are showing all the signs of stabilising that we would normally expect, and we anticipate this being a similar trend over the coming months until the election is over.”

The number of properties available for sale rose by 1895 in June compared to 12 months ago, although the number of properties for sale in the Auckland region has increased by 3097 (57%). Excluding Auckland, the number of properties for sale fell by 1203 (7.4%).

The number of properties sold by auction continued to decline, down to 828 auction sales in June (14% of all sales, from 13% in May, 24% in June 2016).

Auckland mayor Phil Goff releases the report today of the housing taskforce he appointed in February.

In a release, he said it would make a raft of recommendations to address Auckland’s housing market.

The taskforce brought together people from the public & private sectors with a diverse range of expertise “to identify barriers & constraints to building more homes in Auckland at a pace & scale which meets the demand created by population growth, and to identify options and make recommendations to overcome those barriers & constraints”.

The Government’s Hobsonville Point development reached a landmark 1000 homes occupied this week, celebrated with a visit to the latest residents by Social Housing Minister Amy Adams and local MP (and deputy prime minister) Paula Bennett.

HLC Ltd (ex-Hobsonville Land Co Ltd) chief executive Chris Aiken told the ministers 409 of new homes sold had gone to first-homebuyers and were in the “affordable” category, priced under $550,000. The average price across the development was $730,000.

Another 630 new homes are at various stages of production.

HLC has masterplanned the former Hobsonville airbase, but all the subdivisions on it are being carried out by private developers. The 1000th home, on Squadron Drive, is by Jalcon Homes.

Ms Adams, who’s also minister responsible for social investment, brought a different perspective to the housing role from her predecessor’s in a city where construction hasn’t kept pace with net immigration, let alone internal population growth.

Nick Smith, as housing, building & construction minister (and he retains the last 2 of those titles), was all about getting construction numbers up, and never sounded like he wanted to put that in context.

Ms Adams was pleased to see the 167ha of Hobsonville Point being turned into a vibrant community: “It’s not just about the new houses we’re building, it’s about the quality of community.”

Many of the homes at Hobsonville Point fit HLC’s Axis series design of cheaper, highly efficient construction, and Ms Adams said that raising the standard in this way would have an effect far beyond Hobsonville Point.

She also noted that, although the Government had instituted a programme of putting Crown-owned land to more productive use, including housing development, its holdings represented only 5% of housing land in Auckland.

Crown land is being used to lift construction output, and Ms Adams said that was a strategy that could be adopted in future downturns, to help the sector meet capacity requirements.

She also visited a new $12 million transitional housing complex on Puhinui Rd, Manukau, yesterday, and put that spurt of emergency accommodation into perspective: “When we think about social housing, it’s not just the number of houses [or flats or motel beds]. You have to think: Is there a market of houses we can move people back into?”

Hobsonville Point is one of many developments around the Auckland which have begun to lift construction from the low point in 2011, when only 13,500 consents for new homes were issued nationally. In the last 12 months, 10,200 consents have been issued in Auckland alone.

The 72-unit Puhinui Rd facility will help house up to 560 families/year, out of an estimated 3660 Auckland families and 8600 nationally who would need transitional housing in a year.

About Bob Dey Property

The Bob Dey Property website is primarily about commercial & development property in Auckland, policies & strategies that impact on the sector, listed property securities and wider economic influences. It examines infrastructure, access & urban design issues, and presents ideas from around the world. The emphasis is on appropriate depth & context.